david: it is 7:00 a.m. in hong kong. welcome to "daybreak: asia." lawmakers at me on capitol hill in a bid to end the shutdown. a compromise vote could come in the next few hours. to impasse is unlikely derail bullish asia, the january jump is already larger than the 12 previous monthly gains. ramy: and from bloomberg's global headquarters, i am in new york where it is just past 6:00 p.m. on sunday. the standoff may hit president trump's davos plans. the white house will make a travel decision day by day. meanwhile, the world's largest

oil producers hit -- and at extended curbs. they tell us the strategy is working. ♪ ramy: good morning, david, and good morning to our viewers across the asia-pacific and around the world. what we're talking about this whole weekend, the government shutdown. right now, partial, but how total will it get? looking at markets on friday, equity markets closed at record highs for the s&p 500 and nasdaq , but we were talking in the past hour about whether it could hit gdp. it depends on how long it lasts. the longer it goes, the more pain we might see. david: certainly. will it affect risk sentiment? maybe not, we look at indicators.

by the looks of it, we might continue the run. running,nd is up and have a look at the markets there, a jump up there. 8334 right now. the dollar is down again. we are moving slightly into earnings season. look at australia, coming off a 40 skid for that market. cents on the currency there. 288 on the yield, approaching the10-year -- approaching gap for the aussie 10 year yield. in japan,k at futures the yen strength coming through, near 110 on dollar yen. were also watching the yield and the spread on the 10 year and the ten-year treasury. futures indicating maybe decline at the opening.

things will get busier next week. close --i 225, less last close above. oil and energy in the mix. opec and friends indicating production cuts will stay in place as planned. as i alluded to earlier, a lot of strength coming through another currencies, the dollar 1.23again, but the euro, almost on the euro-dollar. democrats backing angela merkel. that is a quick look at markets. let's get you an update on the first word news. here is tom mackenzie. opec and russia say they will maintain all production curves through 2018 and they are ready to cooperate beyond that.

energy -- the energy minister told us the structure would stay until the market rebalances but they would not confirm the curbs will remain through 2019. they anticipate strong growth this year. >> the cooperation between our countries is long-term. regardless of where is in terms of the markets, or other areas. our corporation is based on the agreements we signed in china in 20 16 in september, and i think over the past 1.5 years, we've been actively implementing this, and we have shown a lot of success, a successful run. tom: a new bloomberg survey governor kuroda is increasingly strong favorite to win another term at the bank of japan. the governor has been in charge

since 2013, implementing an unprecedented stimulus program in an attempt to kickstart the japanese economy. the euro gained as germany social democrats voted to open formal talks with chancellor merkel. this paves the way for a fourth term for the chancellor. she welcomed the vote before meeting her own party leaders to plant strategy. as soon asxpected tuesday, ending four months of political stalemate good bitcoin is extending its weekend it's like, falling more than 40% from its high of $19,500. other cryptocurrencies are also under pressure, little his phone ripple has fallen -- fallen 13% since saturday. afghan security forces have 'sded the siege of kabul intercontinental hotel, killing

the last of the militants. at least 18 people died. the taliban said it carried out the attack at the heavily guarded building popular among foreigners and afghan officials. the hotel is not part of the global intercontinental chain. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ david: thank you. top story this hour, shutdown stalemate. as we speak, a group of u.s. senators working on a compromise to get the u.s. government for three more weeks even as the immigration debate continues. the government shutdown on friday for the first time since 2013. krasny isy -- ros following all of this from washington. is there a realistic chance we pull back from this before monday when people really notice the government is closed? ros: exactly. a government shutdown on the weekend does not have that much

impact. monday morning is where the rubber hits the road for government services. vote inpect to have a the senate overnight around 1:00 a.m. washington time, and there has been a group of about 19 bipartisan senators, including some republicans, senator jeff flake, senator susan collins, and also some democrats, they have been talking today and gone back to their respective leadership to see if they can put a proposal on the table that might be acceptable to all, to at least get the government up and running and talk about immigration policy a little later. if we can get the government running until about february 8, 80 they have time to work on other priorities. that is what they are hoping. we do not know what mitch mcconnell and chuck schumer think of this plan so far. david: the next question i have, a lot of the focus right now is on the centrist group.

tell us what they are working on as we speak. in a lot of ways, does this activity suggest party leadership, maybe on both sides, are out of the mainstream? a very good point eared on the democratic side, there are some that feel democratic leadership is very kind of two close -- of too close to the left-leaning, people who are really anti-trump and cannot see any compromise. that is stopping schumer and others for moving to the center. on the republican side, even republican senators like lindsey graham have said there are people within the trump white houseon like adviser stephen miller who are so hard line on immigration that many, proposal is floated to possibly do something a little more in the center, they are pulling president trump back to the right flank.

we have not heard much from president trump this weekend. one tweet from him today saying democrats just want you legal immigrants to pour into the nation unchecked. the rhetoric is harsh when it is out there. it's only doesn't help to get the sites, left and -- to get the sides, left and right, back to center. ramy: the rhetoric is rising and the blaming is beginning you'd in terms of who will get more of the blame, where do we stand now? what messages are out there? , thevery interesting battle of the messages over the weekend. we had the white house trying to brand this retroactively the schumer shut down after chuck schumer. we had the trump shutdown. fromd a very harsh ad donald trump for president that basically said democrats were complicit in every murder

committed by end illegal alien or undocumented immigrants. that is pretty harsh. whereas democrats may have trouble countering that message or may feel like that messages to extreme for the american people and it could backfire. we also had mike pence today, the vice president, talking to troops in the middle east and being quite harsh and partisan in his comments, which is a sort of unusual we talked to the armed forces. they are supposed to be nonpartisan. there is a lot of rhetoric and it is not getting any nicer as the days go on. we would expect that to get meaner by tomorrow. look and of course we ahead to see what happens in terms of the markets if they do react. ros krasny in washington. take you very much. we will stay with the shutdown and bring in former democratic .enator max baucus from montana

he's also a former u.s. ambassador china. thank you for joining us. you are a diplomat. your version of the middle ground between democrats and republicans right now, to get through and finally end the shutdown? max: i think it is important to remember that almost everybody in congress, both houses and, want to get reelected. that is number one. how do they get reelected? they do what the folks back home want. 60%-70% of the voters want a solution, for congress to get its act together and find a compromise. most voters are not way to the right or wait the left, they just want to get something accomplished and it done. that means they have to stand up a little more. it requires more courage now but with socialago media and the hothouse of the washington, d.c. and the echo chamber there.

solution want to get a , i think it's the vast majority of those in congress, have to realize that the people at home really do want compromise, and is senators were to compromise, they will then be able to send a package to the president. the president is virtually irrelevant in a lot of respects. he contradicts himself and changes his mind so often. i think he will sign any reasonable package that the congress, in this case basically the senate, send to him. is hard, but these guys ran for this job, so you have to be courageous and compromised because that is what people want. ramy: republicans say democrats are holding government hostage over one issue, immigration, daca. is now the time to push this through or can it be waited on for the future? max: there is always a way to

skin a cat. i mean democrats should stand up for daca, it is so important. but there is a way they can do it where the other side could save some face. isbe a procedure where daca taken up and assured passage soon, maybe february or march. look for ways to stand up for your principles but give the other side respect, listen to the other side a little bit, let the other side save some face, and then worked for a combined solution. ramy: there is concern about donald trump saying he would be ok with the nuclear option in the senate, as some people say, the most deliberative body in the world. what are your thoughts? cause problemser not just now, but in the future? let's say democrats retake the senate, the pendulum could swing back at him. max: i'm not wild about the

so-called nuclear option. i think the current senate procedures, which in most cases require 60 votes, encourage compromise. parties toes both work together. otherwise, the majority has absolute control, as it does in the house. the tyranny of the majority. it is awkward for the majority face theetimes have to requirement, but it helps senators work together to get compromises. i would keep the 60 vote requirement. david: good morning from hong kong. we are showing our viewers some live pictures coming out of the senate floor where they are debating as we speak. do you think we will get a compromise agreement, out before monday starts in the u.s.? , i'm not not there part of the negotiations, but the pressure is very great, .ounting almost exponentially

i think there's a good chance they will get an agreement in the next -- if not first thing in the morning, but later in the day. i think they will get it because they have to. to extend proposal is the stopgap funding into the first week of february. i am watching this from outside the united states. what is to say we won't be back here having the same conversation this time in february when perhaps again we could be faced with another shutdown? max: that is the question. there is no guarantee. but if that is the case, i think there will be a bigger outcry from the public about what is going on in washington. there is going to come a time, a tipping point where enough is enough and that will rebound against both members of congress. they want to get reelected and do the things people back home want.

they will be forced more and more to work together if there are more shutdowns and short-term stopgap three david: that was our former senator from montana. coming up, to give you a sense of where we are going, we had to tokyo or preview of the upcoming boj meeting. signsare increasing governor kuroda will be staying on. that's next. this is bloomberg. ♪

♪ ."vid: this is "daybreak: asia ramy: the bank of japan starts its two-day policy meeting today with watchers expecting no change in policy while traders are betting that could be a small tweak at least for future actions. our global economics and policy editor is this week in tokyo

with a preview. kathleen? kathleen: thank you so much. can you to walk -- hello to you and your viewers. in terms of fuel control, buying inflation, governor kuroda said we could go in his speech to regional branch managers that he expects the boj to keep moving toward its 2% price target. some of the factors, strong productive -- production, tight labor market, these are feeling reflation in japan. if you don't believe me, look at 7942. you can see, most important, the white line on this chart showing that it is up to 0.9% year-over-year. the target is 2%. as recently as september 2017 it was negative. 1.4 percentage points, a strong

move higher. as far as bond purchases, watches are saying bond buyers jumped the gun. they thought the boj was signaling a taper, that they think the boj is not ready yet. the boj is wondering how to communicate policy effectively. opened -- ", the wall street journal" reporting on this, the this,g -- reporting on some policymakers are raising the issue and saying it has to be discussed. now, it is to hold policy steady and signaled no change ahead. david: thank you, kathleen. let's get more on the story on an boj, joining us is asia-pacific economist. i am a bit surprise we are already having this conversation on the boj, i thought this was a

2019 story. is there economic justification for them to start talking about pulling back? >> that is a really good point. investors have become a little bit nervous because of a series of factors that have happened in the last couple of months, and might have overreacted to a series of news. on one hand, we have global liquidity, the ecb has started to cut the pace at which it buys bonds starting from this month. corona -- governor kuroda did mention reversal rates in zurich last month and that took everyone by surprise. to make anyo early changes in monetary policy for a number of reasons. first of all, nobody wants to risk yen inflation. especially given that the cold and -- the current goldilocks environment still has a few months in recovery in japan is primarily export lead. secondly, with governor kuroda

being near the end of his term, it is unlikely he will do anything to jeopardize his legacy. david: in terms of a potential tweak, and i emphasize the word potential, there are questions around yield curve control, and the entire policy, especially when you look at the spread with u.s. treasury. do they need to rethink that at zero? do you think they will be increasing that in the next few months? carlos: that is an interesting point. there are two aspects to your question. the first one is the fact that bond year -- yield control is technically a taper, with the boj accounting for an ever-increasing share of the global market and they can afford to control by deals or keep them at the desired level by purchasing less. in a sense, that will continue into 2018. they won't have to buy as many to keep rates at the desired level. the second part of the equation

is what the desired level will be. there is a lot of talk or speculation they might be more comfortable with letting him bond yields go slightly above especially possible, after the first quarter of the year. inflation expectations need to be really solid and materialize before the boj is capable of making that decision. for aof move to inflation quickly. currently, looking at 1.4% for 2019. some say it is too optimistic. what do you think? carlos: i believe that is too optimistic. ramy: [laughter] ok. pickup in've seen a inflation, i was checking out my terminal yesterday, 11 consecutive months of gains. it is a positive story, however, it is too early to see to it -- to say whether it will stick into 2018. we don't know whether oil prices will continue to remain high and

if that will translate to import inflation in japan, and the second part is the domestic portion. the labor market is tight, but we have to see if that will translate to a significant increase in wages. so far, they have increased by a little more than inflation, not substantial enough to feel domestic demand. we have to wait and see what will happen in the spring, whether wage increases will translate. and we can see if the target is achievable. ramy: we will have to leave it there. thank you very much. you can get a roundup of the stories you need to know to get your day going in today's edition of "daybreak." --omberg surprises subscribers can find it on their terminal. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪

♪ is "daybreak: asia,"

i am david ingles. ramy: and i am ramy inocencio. wanda's boss says the group will not default and pay off its foreign debt. they are facing official scrutiny over its foreign investment strategy. in july, the group sold most of its theme park and hotel assets, which cut its debt by $7 billion and leave them about 10 billion dollars in cash. reliance industries salt profit --ch expectations lifted by lifted in the third quarter. they will need a strong results as they face growing competition in telecom and retail. withstormed the market free calls and data 16 months ago. opec and russia could be

ready to extend production cuts into the year 2019. we will hear moscow's view next. this is bloomberg. ♪

♪ david: it is a 7:30 in the morning monday here in hong kong. open the markets in tokyo and 30 minutes. is that faulk or something else og or something else? ramy: it is 6:30 p.m. in new york, you can see the empire state building. markets are closed up, the s&p 500 up most have a percent. and therecord high, nasdaq also closed at another record high. the dow close. it looks like investors are not concerned for the time being on the partial permit shutdown. i am ramy inocencio in new york. david: and i am david ingles in

hong kong. you are watching "daybreak: asia ." let's get to the first word news. lawmakers are meeting on capitol hill in an attempt to find a compromise on spending and end the government shutdown. they're hashing out the plans to break the stalemate over funding and immigration with mitch mcconnell indicating a vote in the early hours of monday morning in washington. senators from both parties are discussing options that could extend stopgap federal funding through february 8. research from -- new research suggests the catalan independence campaign has hurt the economy. spain's biggest local economy is trailing national growth this year. bbva test slashed its forecast for spain, but says the impact from the catalan campaign has been limited. the economic is to sell more stakes in state enterprises -- vietnam is to sell more stakes and state enterprises.

the government says it expects to exceed growth targets. the deputy prime minister said the state raised $6 billion in 2017 and will sell must seven times as many shares this year. the amount has one of the world's fastest-growing -- vietnam has one of the world's fastest-growing economies but is saddled with high public debt. i am confident we can reach our gdp growth target of 6.7% for 2018. to do that, we need to continue focusing on several key areas and continued the strength in the banking and finance sector, lower interest rates and increase spending on the construction sector, agriculture and service industries like tourism. tom: singapore office rents are opposed to face -- are opposed posed tohe guest-- have the biggest games this

year. they could rise 25%. rents in hong kong's central business district are expected to rise 12% global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. . this is bloomberg. thank you, we are just under 30 minutes away from the open of cash markets in tokyo. what are we looking at? nikkei 225 opening sideways here. we are joined by sophie kamaruddin. we have hit multiple records this year already, despite naysayers. bear in mind stocks are still looking cheap in asia, especially when you consider the relative valuation compared to the u.s., especially after outpacing u.s. stocks last year. but look at 5545.

basis, trading close to a 13 year low relative the s&p 500, and on a price-to-book basis, the cheapest and 16 years. bear in mind not all asia stocks are cut from the same cloth, but attractive valuations and management points, with asia providing one quarter and a third of all dividends globally, the region still barely features in the portfolios and boast income investors feared -- the portfolios of most income investors. ramy: goldman anticipates a ramp-up in global inflows. what is the detail here? ebbed: foreign inflows in 2014, but with prospects with growth driven only by exports showing a, that is

lowering picture for foreign investors that are currently underway to japan. the performance by the and also boding well for corporate performance. there is political stability to consider as well. 5707, it shows you the latest data indicating foreign funds have been piling into japanese stocks this year. we have a four straight weeks of inflows so far in 2018, and this week of course, we will be waiting to hear from the boj to learn any clues about policy normalization and the potential extension of governor kuroda at the helm. outlook andderly economic growth, that report is due. let's check in on futures for trading in tokyo. investors also have the latest ppi data to consider, isis rose 2.3% in december, slower than -- prices rose 2.3% in december. ramy: a very busy week in terms

of eco-data in asia. opec and oil now, and russia say output curbs are to stay at least until the end of this year. that as oil producers continue to work to clear the global glut. the saudi and russia energy ministers told us the oil market still is not fully rebalance. -- rebalanced. >> we need have enough producers ready to intervene at the appropriate time to adjust production to deal with fundamentals and market shocks. in the old days, it used to be opec. opec countries controlled enough of global production and exports to be able to have that influence. given the size of the market, we are approaching 100 , opec isarrels per day

about 34 or so. we don't feel opec alone can do it. until wehy we waited had enough not opec countries, led by russia, to come together in late 2016 and announce the declaration of cooperation that started in january 2017. it has been very successful, the results speak for themselves. of 2017ce in december is at a record 129. unthinkable when we started. now we need to think as we approach rebalancing by the end of 2018, what do we do beyond? my personal belief is that we need to extend the framework, but not necessarily the production links -- length. we aremework

formalizing, hopefully, at a minimum keeping the context between opec and not opec, and finding a way to be able to get together quickly and not wait for a year of negotiations and deliberations. >> and you are on board with this continued cooperation? what kind of mechanisms to think need to be in place for this? cooperationeen between our countries is long-term. regardless of where it is in terms of the markets, market stabilization or other areas. our cooperation is based on agreements we have signed in china back in 2016 in september, and i think over the last 1.5 years, we've been actively implementing this, we have shown a lot of success, we had a successful run. the two biggest exporters joining on 22 million barrels per day cannot ignore each other not corporate. we believe corporation can be

done in order to help stabilize the market or done in other areas of the economy. once again, i would like to stress the almost two years of success that have shown this. we will continue incorporating regardless of whether we need to extend the cut or not, because that will help the market, it will help consumers and producers. i would like to remind you we have signed a roadmap, an agreement to operate broadly in the economic sense, which has more than 30 potential perspective projects. david: that was the russian energy minister and the saudi energy minister speaking with our reporter. a quick check of where we are. lower.ed a little it is monday morning. we are joined by aaron clark. a big we can the terms of the oil narrative. what are some of the key takeaways from the meeting in oman? aaron: i think the big point

here is that opec and its main ally russia me a form -- reaffirmed they will continue the production cuts into 2018. they said thing is they are open to coordinating and 2019, they did not say they were necessarily extend the cuts into 2019, they did not say what mechanism they might use, but i think clearly russia and saudi arabia, saudi is kind of the de facto leader of opec, they are the main players in this and are coordinating oil policy and having significant impact on global oil markets. inventories come down, they are still above the five-year average in most places, that they have certainly come down from the surplus we saw last year. near $70, nearg three-year highs. clearly the policy opec and its allies have implemented, the production cuts, is working.

you have seen success so far this year. ramy: in terms of the risk to this agreement with opec as well through the lens of u.s. shall rising in the past few weeks, past few months, mark share for opec and russia should definitely be one of the concerns, one of the risks, right? aaron: i think that is the biggest risk. $65,usly was oil at around $70 per barrel, u.s. producers will increase production. the international energy agency said last week you could see explosive growth this year from u.s. shall producers. producers. they're likely to boost production. the risk for opec as they lose market share. you have analysts estimating global oil command -- demand year, and ifis opec maintains the cuts, they might not get any of that growth. you may see shale producers and not opec producers like canada

actually expand global market share. that is the bigger risk to opec and russia with this strategy. ramy: and you can't blame them for taking the opportunity if it is presented to them. aaron clark in tokyo, thank you very much. let's look ahead to the we can on wall street. to see investors focusing on a new round of earnings, economic reports and the drama out of washington. su keenan jointly with the latest on set. a big day, maybe not so much work for the government. su: the big question is direction. atsaw stocks, let's look friday's close, move on to records despite the drama of the government shutdown. it's thought that perhaps they will continue unfazed higher. let's look at 9158. in the past, 2013, the blue line is treasuries and the white is during they dipped here the 2013 shutdown.

they very quickly recovered. the thought is perhaps stocks will continue with a focus on earnings and economic reports and short of shrug off the shutdown. let's take a look at some of the stocks that are set to report earnings this week, because we are in the peak of earnings season. ge will clearly be a focused stock, especially if they cannot with a pension nightmare that is waiting on the company. selloff theking to unit. it will be headlined stock. halliburtont intel, , intel is in the spotlight as well given the floor in the chips.- the flaw in the a very interesting we can earnings ahead and a lot of headlines likely to come out of that. ramy: in terms of other eco-data , gdp is on the docket and home sales. what can we expect? su: they will be in the expected, economists

gdp will continue to rise at a rate of 3% increase in the fourth quarter. that's on the hills of robust household spending and business investment in equipment. home construction is also in the spotlight. we had freezing weather just a couple of weeks back. that is expected to have some impact them a perhaps a downturn in work production. again, there is optimism there as well. and factory orders. probably increased in december, according to economists surveyed by bloomberg, that factories will continue to make progress. there is a big question about president trump's planned trip to davos. he is scheduled to give a keynote speech on the final day of the world economic forum. he is going to attend supposedly, but those plans could be up ended if we don't have a swift resolution to the partial shutdown of the u.s. government. there are weekend meetings in place.

perhaps senator schumer, the lead democrat, saying that negotiating with trump is like negotiating with the jell-o gives you an idea of how difficult it could be to reach a resolution of this point. david: good morning. we're looking at the commodities space, we're talking about oil minutes ago. were looking at hedge funds essentially increasing their bullish. su: bullish short-term. bloomberg, as we opec output coming down, there is a concern with the drop in u.s. supply, you can have an increase in u.s. output. that is a cautionary note as we see the hedge funds pile in. let's go to the oil chart as oil has approached $65. what we have is a net long position by money managers that

is now at a record. in terms of gold, it is the highest we have seen in seven weeks. in the short-term, a very bullish position. gold has come off the drop in december, and it explains why there is optimism in the near term. david: thank you so much. of -- the wildt ride continues and we will ask what is next for bitcoin? this is bloomberg. ♪

♪ david: this is "daybreak: asia." ramy: the bitcoin roller coaster continued over the weekend, fluctuating between 11000 and $12,000, down more than 40% since its $19,000 high, just

about a month ago. our next guest says the cryptocurrency could fall to as much as $5,000 for finding support. with us to dig into the volatile cryptocurrency is g-v a research ceo david garrity. who has not been covering this on and off again? $5,000 is a big fall. david: if you look at the second half of 2017, after china came out and announced they were going to effectively for bid -- forbid ico's, bitcoin fell but then it came back up. from $5,000 going up to $20,000 of the end of the year. at that point, we had the creation of futures trading by the cme and cboe. one would argue that something is not a real market intel you can actually short it. with futures, you might not be

able to short out right but you are moving more in that direction. from a technical standpoint, we can say this move from $5,000 to $20,000 created a huge gap. typically what would happen is you would need to have some backend filling. we've had a further announcements coming out, whether it is a's indicating they might make a decision or not, or you have the treasury secretary saying we could not necessarily have cryptocurrencies the coming the equivalent of a swiss bank account. the indications are there that something might be done. from a trading standpoint, clearly sentiment is driving the market. why? because as of yet we don't necessarily have mass adoption on the part of bitcoin for payment purposes. ofhave these moves in terms pricing, but if you look at the underlying transactions in bitcoin, i have not gone up as much, which clearly indicates a type of speculative move.

all of these are elements that would argue that hacking and -- backinght be the and filling might be the order of the day. we would need an application that would lead to greater mass adoption. ramy: we have seen this rise in terms of initial point offerings. wants to askn me how much of this is opportunism to get on the bandwagon before it falls further. not seen the willie sutton ico. he was famous for robbing banks. that said, were looking at ico's with a broader adoption of blockchain, because you can use it for a wide range of applications. it can be used to combat advertising fraud and digital advertising. there is a next will use case and customers are using the

technology. as investors go through and look , you have to look far more closely, these are not registered with the sec, they might not have a standard disclosure. you have to ask if there is a good underlying use case, you almost have to be a venture capitalist, does this application makes sense? we want to make sure were not out there buying the doggie coin, which is not have an update in two years and has a billion dollar market cap. billion.hink it's $2 david: nevertheless, it is a joke. nevertheless, someone is buying it. i am curious, you said $5,000, why $5,000? david: i am doing it more on the broad sense of seeing what the general levels from which there are actual moves. in the last six months. and arguing to the extent that

we have seen this meteor rise in the -- rise in the fourth quarter, we've seen more of an institutionalization of the market. we are not necessarily a point where we have a fully blown market to the extent we can't go out and basically short going out right, but at least we can use the futures market to approximate synthetic shorts in that regard. we need to see how these play out. i would argue that as things become more institutional, they perhaps become a little bit less suspect to the kind of frenzied enthusiasm you my face -- you might say has characterized the market today. david: for those just getting in wanting to trade this thing, we look at -- what are the signposts when i trade crypto? rity: supported by

underlying transaction moves. bitcoin is not the only cryptocurrency out there. there are others such as ether being used to build other applications. are we starting to see these killer applications start to lead to greater mass adoption relevant to the blockchain protocols underlying the cryptocurrency? the have a price move not being matched by what is happening in the real economy in terms of goods and services, it probably is something more of a speculative nature than has underpinnings. confidence tove see what is going on the real world. david: good point. david garrity there. lots more coming up. this is bloomberg. ♪

♪ ."my: this is "daybreak: asia i am ramy inocencio in new york. david: i'm david ingles in hong kong. it's good the latest business flash headlines. coca-cola has announced an ambitious ways to strategy, aiming to select and recycle 100% of global packaging by 2030. the coming operates in more than 200 countries and areas and says they want to recycle one bottle or can for everyone it sold by the end of the next decade. the ceo also told us that nafta and other global trade deals are helpful and the u.s. should not disrupt them. the world'smy: biggest sport show maker is prepared to off about $1.5 billion to do list -- to delist from the hong kong stock exchange. the group makes more than 300

million pairs of athletic shoes each year and accounts to 20% of a combined wholesale value of sports and leisure for your -- leisure for wear. coming up, you will hear about that soon. this is bloomberg. this is bloomberg. we use our phones and computers the same way these days.

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a new lg x charge. it's a new kind of network designed to save you money. call, visit, or go to xfinitymobile.com ♪ did is 8:00 a.m. in hong kong. stories, lawmakers meet on capitol hill to end the shutdown, a compromise vote could come in the next few hours. politics dominates the markets. dollar weakness, while the euro on a tear in the hopes of a german coalition. >> it is just past 7:00 p.m. sunday in new york. coca-cola has a word of advice. the ceo tells us the best policy is to sit back and wait. vietnam will sell more

state-owned companies. it is expected to exceed its growth target this year. ♪ david: good morning. up across theg asia-pacific. we will get to the opening numbers in a minute. we are following dollar down, majors on the way up. i am also watching yields and this bond bleed. have a look at our bloomberg chart. we are approaching key levels on the 10 year yield in australia. the yellow line indicates the cap in march 2015. people were talking about 3%. before we get to that

conversation, we have to clear the hurdle of where we are right now, 2.88%. this gap is what we're talking 2.91 down tohere, 2.86%. yields, theg about u.s. 10 year, 2.65% is what we are inching towards, the high-end since may 12, 2014. maybe a little reaction from what's happening in terms of the government shutdown. we did not see anything in u.s. equities. we might see something moving maybe not people say equities, but gdp growth, looking ahead. back to you. we can't look further

than that. gdp report out of the u.s. on friday. let's get you a sense of markets with sophie kamaruddin. we have a busy backdrop when it comes to davos. corporate and government the sending and we will wait to hear what they have to say. asian investors might shrug off what's happening to see whether we can sustain the rally in asia. a pretty good start to the year. let's check in on the open in tokyo and seoul, korea, the yen firmer. there is not much in the way of data today. we have thailand trade and taiwanese export orders. this morning, south korean cpa prices indicated moderating growth in december. yields will be closely watched.

that is a backdrop for today's session. treasury yields the highest in three years on friday, so that bond space will be closely tched. also in the commodities space, opec, and china releasing december output data monday. we have the boj policy meeting, expecting a decision on tuesday, expected to stand pat. i wanted to pull up this chart. banking stocks have outperformed the broader market when governor kuroda talked about the reversal rate. so we have the pricing in of a potential policy normalization. boj watchers are not expecting that. when it comes to stocks to watch, japanese financials today after a series of stock three

ratings. toan post and nomura raised buy from neutral at goldman sachs. kamaruddin. thank you very much. let's get first word news with tom mackenzie. and russia say they will onntain curbs through 2018 hence they are ready to cooperate beyond that. the russian oil minister said restrictions would stay until the market rebalances. the international energy agency expects strong growth for crude this year. that cooperation between our countries is long-term, and in terms of the markets, market stabilization, or other areas.

thecooperation is based on agreements we signed in china in 2016, and over the past 1.5 lots we have shown a very a -- a lot of success. afghan security forces have ended the seizure of kabul's kabul'snjudgmental -- intercontinental hotel. the taliban said it carried out the attack of the heavily guarded building popular among foreigners and afghan officials. the hotel is not part of the global intercontinental chain. new survey says governor kuroda is a strong favorite to win a second term at the bank. said anys we spoke to choice except governor kuroda will likely see the yen rise. chargeernor has been in since 2013, implementing an unprecedented stimulus program to kickstart the japanese

economy. socialo gained as democrats open formal talks with chancellor angela merkel. it paves the way for a fourth term for the chancellor. she welcomed the vote. coalition talks are expected to start as soon as tuesday, ending four months of political stalemate. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ramy: thank you. to our top story, the shutdown stalemate in washington, u.s. senators working on a compromise to get the u.s. government-funded for three more weeks as that immigration debate continues. the federal government shutdown on friday for the first time since 2013. we are following the drama from washington. , is there ation is

realistic chance we can pull back from the of this before monday in the u.s.? the deadline is 1:00 a.m. washington time when people notice the government is indeed closed. >> they can flip on their television and see the vote on the senate floor about reopening the government. the main sticking point continues to be on the links of any continuing resolution to fund and reopen the government, and the commitment from republican leadership to have a vote at some point should the government reopen on daca to protect young, undocumented immigrants. ,here was a group of bipartisan moderate senators who met this afternoon and sent ideas back to their party leadership.

it seems like mitch mcconnell counterpartcratic chuck schumer met after that and came up with no agreement, so it looks like that 1:00 a.m. vote is the one we have to watch. no agreement, and if anything, we have not heard much from the white house that shows they are pushing back on what many lawmakers see as a moderate proposal on immigration, suggesting it really may be a radical proposal. ramy: you are looking at live pictures from capitol hill, the senate floor, not so much happening, but six hours from now we are expecting some kind of vote on this floor. in terms of that centrist group you have been talking about, what are they working on today that really gets to the heart of this compromise? have aink they want to commitment that if they do go

ahead and get the government reopen, that things such as senators lindsey graham, jeff flake, many democrats have been working on, dick durbin, which is a broader immigration bill, especially one focused on young immigrants, will be considered by the senate and also by the house. sometime between now and early february when there will be another shutdown showdown. , because bothin , thee republican side white house taking a hard-line position it would seem, and democratic leadership has engaged its anti-trump base, not a lot of room to compromised, and that is the danger going into tonight to vote.

we have noticed very little from the shutdown so far. it has been the weekend. come monday, a lot of services would be shutdown and a lot of americans will start to phone into their senators and representatives and start to complain. david: if i had to blame one side, who do i blame? democrats or the republicans for this one? >> you could probably blame both sides. , as recentlyld say as friday when chuck schumer went to the white house and had a 90 minute meeting with president trump. he came away and said he made some concessions. he said he made some compromises with the president for funding for the border wall to the tune of -- well, we don't know, but it may be in the region of $18 billion.

two hours later, it seems like the deal fell apart. chuck schumer and the democrats blaming republicans, where as trump and the republicans trying to make this a democratic showdown. indicate towant to the american people that democrats went to the mat on this immigration issue, and even though most americans are in favor of helping the so-called , they probably don't see the budget and funding the federal government as the right time to do that, so each side is trying to cast the debate in its own terms and to get ahead of public opinion on this. opinion polls probably put the blame more on trump and the republicans at this point, but every day that goes by is an opportunity to shape and reshape the narrative. david: live for us late in

washington, and a lot happening over the next few hours when it comes to the stalemate taking place right now. boj kicks offhe its two-day policy meeting in tokyo. we will look at whether it is with ar a policy change guest in about half an hour. analyst is in one the studio with his outlook for 2018. don't miss it. this is bloomberg. ♪

david: this is "bloomberg markets: asia." i am david ingles in hong kong. ramy: i am ramy inocencio in new york. traders unlikely to worry about the u.s. government shutdown when they have so many

tempting rallies to occupy them in asia. heading for a seventh straight weekly gain. with bring in mark tinker axa. we are still looking at an uptick across equities. apart from the fact some might isk overextended short-term, there a reason not to be investing in equities? >> there is not a reason not to be invested in asia. international investors are waking up to the fact that asia has the economic growth, but the earnings growth and dividend stories youall the are interested in in terms of thematic growth, and there is by you way she. basically, we have ignored it for years come a but now need to be thinking about what is going on in asia. david: it is cheaper compared to

the u.s. >> it is cheap against the u.s., as it was after the 1997 crisis. we are a world away from then. china's gdp was less than $1 trillion. it is a different world from back then when it was all about world money from leveraged consumer booms and asia. this is about the internal recycling of wealth within the whole of asia. there are so many strong thematic stock stories and sector stories in asia. yes, it is cheap against america, as it was back then. david: we have a chart to illustrate that. 3996 on your bloomberg. we will show you the spread, the ford pe and price-to-book. is this a vote against equities. where does this allocation get taken from? >> i think it is partly from

u.s. equities. this is where the money coming out of fixed income, u.s. fixed income, is starting to say, look at my relative returns. the other part is not just asian equities, it is coming to him emerging-market debt. you have sovereign debt yielding significantly more than u.s. and european corporates. there's been no qe in sovereign debt emerging markets in asia. .hat helps currencies there is less currency risk because the dollar is weakening. comings a perfect storm for asian assets generally. theink asian equities have follow on from some great economic stories. david: we are entering earnings season. japan gets busy in about two weeks, hong kong in three weeks.

we will get an is stellar earnings season. assuming we get flat earnings growth, with that make you change your mind? >> were talking about general allocations. what we do is we have to find the right stocks. single company will do tremendously out of this. you do have to focus on the fundamentals. ist we think is interesting this is not about creating this artificial product using leverage, etc. , findingack to basics good companies in the right places at the right times generating good cash flow and handing out good dividends. 30% of dividends come out of asia. come see what is over here. -- by the the index index.

focus on stock fundamentals. there are some great stories with one belt, one road, the restructuring of the chinese financial system, automation and robotics has been a tremendous story over the last year. more industrial robots than everybody else put together. if you are in that space, there -- last year at davos, they called it the fourth industrial revolution. this is going on and asia will not miss out on this one. asia is that the heart of this fourth industrial revolution, and there are some tremendous stock specifics going on here. about it will never be super cheap, but how cheap is it versus the growth risk? don't just buy a whole index. buying stock specifics in the right place. ramy: i'm looking at commodities. we have been reporting on this,

hitting highs here and there. the index is near the highest since march last year. is it too late to get into this right now, especially with chinese growth at 6.9%? what are your thoughts in terms of strategy? , icurrencies and commodities don't consider them asset classes. they are tradable goods. we have seen people suddenly focus on the fact, but the one caution i would have is chinese new year. you tend to get a tremendous amount of activity ahead of chinese new year. be careful because a lot of those inventories and china are at high levels. we've done some stocking ahead of it. the other day, the shipping index, that has rolled over a little bit in the last month or so. for me, that is quite often an early warning that activity will

come off the top. we had a great rally last year in commodities, and that was partly because the chinese government took control of supply and basically stopped the flooding of market with excess, whether it was steel or iron ore . they tighten things up, and that's what gave us the real boot. for me it looks like it is running out of steam. cyclical growth, but commodities are about not just demand, but supply. looking likede is it is responding and enough that i would be a little worried about the short-term continuation of this particular momentum trade. stuff.reat we have to leave it there, but looking ahead to 2018 with mark tinker from axa.

next, raising revenue, we hear from vietnam step he prime minister on his plans to sell more stake in state-owned companies. this is bloomberg. ♪

ramy: welcome back. house will decide on a day to day basis whether president trump and administration officials will attend the world economic forum in davos this week. the shutdown means the final decision has not been made with the president originally due to fly to switzerland on january 25 he is expected to reinforc his america first message if he does go to do.. the deputy prime minister of vietnam is heading to vos and spoke to our managing director about the nation's plans to accelerate sales in state owned

enterprises. there are two main issues for us as we try to restructure our economy. first, we have in proof productivity. second, we must cut down on ineffective esso east -- state owned enterprises. can reach the we gdp growth target of 6.7% for 2018, but we need to focus on key areas, strengthening banking and financing, lower interest rates, and increase spending on the construction sector, agricultural sector, and service industries like tourism. we need to improve the productivity of ineffective state owned enterprises. race $6 billion from the sale of public assets. obviously a lot of public interest. how much do you plan to raise

for the first half of the year as well as 2018? the success of that deal in 2017 and continued improvement in the legal system to aid privatizations, we will continue this path in 2018. the total value of companies we plan to sell stakes in his 10 times bigger than 2017 and includes energy, power, oil, and gas. all investors domestic or foreign will be able to buy stocks in line with the market mechanisms and all of the deals will be transparent and public. the ipo of the oil refinery company is a good example. stock has been sold at a price 1.6 times higher than the reference price. is $2venue from this deal billion. there are 700 investors holding stocks, both domestic and foreign. the ultimate goal is to make

state-owned enterprises run effectively and profitably. investors attract that are capable in terms of capital expertise come up because our ultimate goal is to improve the performance of the state owned enterprises. ♪ erprises. ♪

david: 8:30 in the morning, it is hot and steamy. it will come down hard in the afternoon. we are an hour from the open of markets in the lion city. i am david ingles in hong kong. not mind that winter weather. i am ramy inocencio in new york, and you are watching daybreak asia. let's get to first word news with tom mackenzie. tom: lawmakers are meeting on capitol hill in an attempt to find a compromise on spending and and the government shutdown. they are hashing out the plans in thek the stalemate early hours of monday morning in washington. senators from both parties are discussing options that could

extend stopgap federal funding to february 8. research from the madrid bank b bva said there is weakness across the board from job creation to consumer spending and tourism with the bank's local economy trailing national growth this year. they smashed their forecast for spain, though they say the impacts from the catalonian campaign have been limited. singapore is going to set the biggest gains among asian cities. rent is rising in all major asian cities across two years with the exception of tokyo. singapore leads the pack with surging to 25% as growing demand faces moderating supply. the same -- the hong kong central business districts will .ise 12% saudi arabia has shot down a missile fired by the iran backed militants in yemen towards a southern city.

the launch was confirmed as a saudi military base target. there have been thousands of people killed and millions displaced. the conflict has seen -- is seen as part of a broader struggle between saudi arabia and iran for more influence. bitcoin is extending the weekly slide, falling 40% from the high of 19 point -- 19 thousand dollars. ripple has fallen 13% since saturday and is now 60% below january 4. a theory him and like point -- ethereum and likely are both down -- lightcoin are also down. this is bloomberg. david: have a look at the bottom of your screen. we are a little lower on the regional benchmark. if that is accurate or representative of what we are seeing across the asia-pacific.

sophie is in malaysia with a look at markets early monday morning. sophie. we are seeing weakness when it comes to benchmark. that is representative of the mood in japan. the topics has been fluctuating all morning, this as the -- topix has been fluctuating as the yen gains against the dollar. that will continue with speculation rising over the boj. looking at the imap function on the terminal, when it comes to laggards among groups, you have discretionary utilities and energy leading laggards, then financials are the best .erformers today after stocks then the movers of the board, we have msn hd insurance and number climbing.g -- nomura

shiva bank is slipping after down grants -- downgrades. we have new pond paint jumping after its longest -- largest shareholder is increasing their representation, so the stock is trading near the highest level in five months. we have japan display climbing after a report saying the camp will supply the new iphone model with lcd. securities in a month experiencing a positive growth, so the stock is the biggest boost of the kospi, but that is not enough to help the kospi along this morning. it is sliding, being let down by materials. ramy: looking ahead, the next month is seen as crucial whether donald trump's threat to be tough on china over trade goes from rhetoric into reality.

he has not followed through so far, but a number of china divisions are piling up on his desk. the managing editor malcolm scott is watching this. the big thing right now we are looking at is aluminum. mr. trump has gone to study the canadian results in barriers. this has to do with barriers. what does this mean? reporter: when mr. trump said this, on the back of the china bashing rhetoric in the campaign, saying tariffs were up 45%, we did not see that. we saw him instant call for studies into the effect of china's exports to the united states. time is up on some of those. they are starting to land on his desk a year into his presidency. he has one in his inbox on steel and whether the imports of chinese steel are hurting the industry. and a similar report on aluminum comes this week as does on the 22nd. on the toy six he will get a

report whether cheap solar panel heorts for china -- 26th will get a report on whether cheap solar panel is hurting the industry. it will become more clear over the next few weeks. ramy: a lot of people, there is really no win-win here when it comes to u.s.-china trade. you heard on one side, something else will happen. the stop -- the solar panels, you stop them from china, it hurts the installers in the united states. what are your thoughts on this on terms of, is there an absolute winner? malcolm: that is the chinese message. they have not been quiet. everyone loses in the trade war. mr. trump did promise action, and so far there has not been much. china's surplus with the united states remains as wide as ever.

recent data showed at 275 billion u.s. dollars. he might have to show, put actions were his words were. this next month is a real chance for him to do so. the state of a union is coming up. we could see rhetoric there, and we have a couple decisions as well looming, one related to the aircraft industry. these are trigger points. we might also get a clue to his thinking, not directly related to china, but if we see a harsh u.s. line on nafta coming up, that might signal that they are about to get tough on china as well. david: as you mentioned, malcolm, he has received the result of this government study on aluminum. we can also look at expensive solar and washing machines for one of them. what is the time limit? he has 20 days to receive the bill of studies to come up with a decision whether to impose

barriers? right.: that is he has 90 days to say whether they will be terrorists -- tariffs or some other talks. the other part of the picture which mr. trump has been linked to is some of the security outcomes, which is unusual. the other part of the puzzle is north korea, how much help is china giving to the u.s. in those north korean negotiations? donald trump used this as something to overhang these relations with china. so if china comes to the table and helps north korea and applies pressure the united states wants, maybe those outcomes are very different. david: i believe the last trade report that came out of the statistics, they even highlighted the fact they've seen a drop in exports.

these are the key dates to watch. you mentioned the 26th of january. what are others? malcolm: the 30th is the state of the union. that will be very important symbolically. february we have that decision on washing machines. there are plenty trigger points, but two of the most important this week are the 22nd on aluminum and the 26 on solar. david: so 22 and 90 days, that is when we get aluminum and perhaps in 90 days we get solar but not close enough. thank you for this wrapup of things to watch ahead when it comes to chinese and american trade. on the program, the top spot, governor kuroda. they are still leading. who will head the boj continuous. we will have more analysis. this is bloomberg. ♪ his is bloomberg. ♪

♪

david: this is daybreak asia. i am david ingles. ramy: i am ramy inocencio. there are plenty of big stories this week that we will discuss here on daybreak asia. on friday we are expecting the latest check on the u.s. economy with the release of fourth-quarter gdp. economists are protesting -- looking for 3% growth in business investment and the growth. i want to look at how this looks at the last decade. in terms of annualized growth we are 2.3%, but this is gdp growth under u.s. president. donald trump in the red, barack obama here. mr. trump wants to get us to 3%. if it does around here, it has not been consistently at 3% since the mid-2000 or so. we will have to see how that goes. the survey according to analysts, we get to 2.7% when that number comes out this

friday. david: we could get there in the u.s., because the other story as well, when you look at japan, we are looking at inflation. to the liv-exs, start first, or does the boj get 2%? nothing at 1.9% on core inflation, we are ticking at -- looking at 1.9% on core inflation. bojstory is in japan, the and the inflation redox, not there for them. -- read offs not there for them. everyone has broken up before, but it hurts. for the boj this is that chart for them. when you see the spread between treasuries and the jgb on the way up, and when you look at how going down, an is lot of that is about dollar weakness, but these things move in tandem, do they need to now

rethink the boj or the yield curve control or the target where they want? that is to mention the recent cutbacks on asset purchases, normalization of policy in the u.s. and it prompted speculation the boj will begin to adjust their strategy. most observers expect no change anytime soon. our policy editor is in tokyo for that meeting of the boj. kathleen. kathleen: thank you so much. we have a perfect guest joining us to discuss everything you you just set up. he is a manager at alliancebernstein japan. welcome. let's just start out with this whole question, because you are such a specialist in the bond market. the fact that this one change in the re-bond purchases, the government control mechanism to keep that 10 year jgb slightly

above zero. traders said, they must be getting ready to cause -- signal a move, but you say not yet. why? >> we had the boj meeting coming up tomorrow, and the market is getting involved. they say the boj is cutting back some tapering. they think tomorrow mr. kuroda his intention, even though the market has been a trigger of a spike in yen 9preciation with the january shifting cut that you mentioned. that is jens -- necessarily the boj has been cutting the longer end of the purchasing program bit by bit, then the one they had on january 9 is preemptive cut in response to the fiscal year 2018 jgb production cuts of your reduction of finance.

the second point is, we are doing this because they want to have more income command for the real money in japan, like the banks. almostn: so the boj has reached its inflation target. as recently as september 2016, the key number was moving up. the governor has said the doj has continued to move towards that price target area why not start to signal as bloomberg news has reported, some people has to say, you have got to talk about the market -- talk to the market about this. why not exit? is to whole of abenomics get to this growth projected -- projection. i think we have been seeing significant growth in japan, real growth. in terms of inflation, the main goal of abenomics is to get japan out of the lost decades,

from a different set. market is definitely underpricing the importance or the influence of the reflationary scam over the boj border and p.m. abe. we should talk to the policymakers and someone who is close to the cabinet of p.m. abe. there are some risks. there are strong influence from abe, as those are the boj supporters. it is pretty obvious that whole trying tois still reassure people. [indiscernible] mr. honda, which is the current japanese ambassador to switzerland, he is a close friend of p.m. abe. i think the market will get us a price if he was elected governor

or deputy governor. the market is paying too much attention on the replacement of mr. kuroda in april, but remember there is to deputy board members -- two deputy board members up for contest, and we should be watching this mostly. kathleen: why not start thinking about forward guidance? you are a bond guy. if governor kuroda could make a little clarification, let people know at some point we will make this move, it seems like the boj is afraid they mentioned they would get tested on yield curve control. when it take us step forward in just take a step forward in forward guidance? >> with inflation around 1%, the core inflation at .9% in november, it might,. the consensus is the cost cpi will peak out in the second half of this year at 1.1%. the core cpi.

otherwise we think it will stay probably at 1%. several points we think, if all the prices are $55 a barrel -- oil prices are $55 a barrel, it will affect core inflation and tightness of labor market and the approach that p.m. abe has in terms of getting the largest corporations in japan to fight. so there is no need for the boj to do anything now, especially given the again -- the yen's spiked recently. you don't want the markets reversing. kathleen: u.s. treasury, broke above 2.63%. that will open the doors or maybe not eventually but maybe soon a run-up to 3%. is that where -- are you bearish on u.s. bonds, and given the boj's stance, what is your trade now in jgb?

>> we think it will probably go three or four times this year. with the data and everything, growth is pretty much very solid, and we have seen inflation trending up. expecting inflation is closer to what the fed was thinking. bond wise, we see bonds might inch up a bit with momentum in the market, but for jgb, for the 10 year, it will be packed around 3%, which is 10 basis points basically. in terms of the curve price, , we might018 year-end get a steeper curve in terms of jgb focusing. they might let the longer ones go, but that is a small bit. kathleen: single word or two word answer, what are you buying in bonds? >> japanese interest. if it stays where it is -- if it stays at 1% this year, above 1%,

the current market is around 62 basis points. inflation is at coefficient of .9%. market is thinking the inflation will peak out in the second half of this year. 1%you have a co-inflation of sustainable, people have to reprice from 62 basis points to 80 or 90 basis points. the weaker yen would help that boj reaffirming its dovish stance. kathleen: i guess i have got my trade ready for me. thank you so much for joining us here in our bloomberg studio and -- in portfolio. ramy inocencio, getting ready for the boj decision tomorrow, but a lot more coming up today. sending it back to you. ramy: kathleen hays, thank you very much. meantime, don't forget our interactive tv function that is tv . you can watch us live and catch up on past interviews and dive into any securities or bloomberg

functions that we talk about. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪

♪ david: this is daybreak asia. i'm david ingles in hong kong. ramy: i am ramy inocencio in new york. with nafta talks in the ballots and other pressure on global

trade deals, coca-cola said it is best to sit back and wait. the ceo told bloomberg said he is still working for recent tax changes. >> we are still working through the numbers. our tax rate was about 24%, so it is not the biggest change for us. because we are international, the absolute rate has not affected us as much as the more domestic prices. we are positive on moving the territorial systems. --think the signification is simplification is positive. it created more demand. that will be good news. we are working through the numbers that we will lay out on our earnings core. we are part of having some of the money overseas, but if it generates more economic growth, that will release more. >> does this affect you at all? >> it will make some difference. we will lay that out. that is not the biggest moving is. >> if there is incremental cash

available to coca-cola, doesn't it go into investment, does it go into buy back of shares, dividends? >> we are not short of cash at the end of the day. we have been a successful company. we have got the resources we need to invest, but we are working through how it works. you have got to pay cash on the tax first. -- tax on the cash first. we are try to make the right allocations. david: what are the big issues -- is one of the big issues is the so-called dreamers , illegal people brought here as children. do they get to stay as adults? do you have people who are uncertain about whether they can stay or not? >> we have some people in our company and in our department to fall under dreamers program. we would love government to find a way to make proper on the line of immigration and including finding a solution for the

soamers that is not disruptive, and they can stay. hopefully they will find a path to that. of course partial solutions, they may be necessary but we would like to see fundamental reform. you ran mexico for coca-cola, so you have seen this on both sides. do you see a path or it, a constructive path forward? >> i think there is, but i think it also is connected. it can't be completely disassociated when you think about long-term fundamentals for getting both economies to grow. in the end, part of what drives the informal immigration is the disparity in economic outlook. having a community of north america where all of the economies are growing actually helps solve that problem. that was james quincey, ceo of coca-cola, speaking with david westin. that is almost it from daybreak asia. time for a look at the next few

hours. we have more for bloomberg markets ahead. rishaad: that is sort of what we do. strategy -- talking about what is going on here, big bank asian equities, and if we have a look at singapore dollar they can also -- [indiscernible] with kathleen hays about the interest rate policy in japan and where if anywhere it goes next. bloomberg markets is next. ♪

♪ politics looming over markets has lawmakers try to end the shutdown. a compromise vote could come in the next few hours. there is also concerned about the effect of weaker consumer sentiment. dalians appointment from wanda, but the chairman in cis the group will not the fault. i am rishaad salamat in hong kong. will sello, vietnam more state-owned companies. we have an exclusive interview. this is "bloomberg markets: asia." ♪